Question: could you help me with the budget constraint and setting up the competitive equilibrium? and how to explain this intuitively for part b 2. {10
could you help me with the budget constraint and setting up the competitive equilibrium? and how to explain this intuitively for part b

2. {10 points} Impact of government spending: Tax on consumption with government spending Consider a two-period economg,r where the representative consumer has a lifetime utility over consumption, C" for t=1,2, dened as U(Cl, 02} = 10301 + 31030:: where ,3 b I). In each period t: 1,2, the consumer provides N3 = 1 units of labor to rms at wage rate wt, receives prots, 11;, from rms. The government levies a tax Tt on consumption and uses the revenue in each period to nance government expenditures, G:- The totai amount of taxes paid by the representative consumer in period t are given by HG:- The consumer can borrow or lend between period 1 and period 2 at real interest rate 1" and chooses consumption (01, 02} and savings to maxinrize their utility. The representative rm has a production technology given by Y = AF(K,N} = AKaN1',0
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